Vegas Maybe, VEGAS!!!

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I’m not sure if it’s hallucinations due to heat stroke or just another dream of striking it rich on the Strip, but it looks like Gary Bettman and the NHL are seriously entertaining the idea of putting another team in the desert.

Whatever the case, I hope they wind up selling the arena rights to the Mirage Hotel & Casino, because boy is the thought of an NHL franchise thriving in Vegas ever an illusion.

The NHL has always been, and will continue to be, a gate-driven league until such a time as it can command a national TV deal in the U.S. Even then, ticket sales will remain a huge proportion of individual team revenues. This means that any new expansion franchise will need a sizeable and sustainable ticket base on which to build its presence in the local market.

Given the culture, demographics and economic realities in Las Vegas, I just don’t see how this can happen.

Sure, the local population base has grown significantly in recent years and is now over 1.9 million in the metro region, making it the 30th largest city in the U.S. But estimates of hockey fans among local residents are in the 100,000 range. When you consider that a solid season ticket base would need to be in the 12,000 range, over 10% of the hockey fans would need to commit to the team on an annual basis.

Making this even harder is the fact that many of these locals work in the gaming industry, which means they are much more likely to be working evenings and potentially unavailble to attend games. So builiding that ticket base among locals is going to be tougher than flopping a straight when you’re all in against pocket aces.

Now, yes, there are also millions of visitors to Vegas every year and they come with pockets full of entertainment dollars ready to spend, mostly on dreams of winning it all, but ultimately leaving empty handed and dejected…hmm, come to think of it, they sound a lot like Leafs’ fans:

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But by definition, those types of casual, transitory hockey fans cannot form part of the season ticket base. They are only there for a weekend or maybe a week. They might got to a game, just like they would go to a show. But that’s it. You can’t rely on them to build a franchise around. You’re talking about a major investment in infrastructure, franchise fees and annual operating costs that need to be supported every year. No savvy business manager is going to do that on spec.

Ah, you say, but won’t the casinos buy up huge blocks of seats to comp and or otherwise attract people to their gaming tables?

Yeah, because casinos want to send their customers to a different venue for three hours.

The entire reason those hotels have entertainment on-site, and comp hotel rooms is to draw TO their gaming floors, not to send them somewhere else and hope that they magically return to their slot machines.

No, if anything, the only way that this model would work is if the arena development includes a hotel and gaming floors, and they are the ones that comp out tickets to the games. But then you’re really talking about a completely subsidized ticket base using the games as a loss leader to boost gambling at their venue.

But if that’s your business model, not sure there’s a great return on the $500 million expansion fee the NHL is asking for…

So yeah. While expansion to Vegas sounds great in concept, like most things related to Vegas, the odds are stacked against it.

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  • Mantastic

    Vegas seems a terrible idea.. for those that missed it, there was some expansion team analysis done last year by the clever folks at fivethirtyeight.com: http://fivethirtyeight.com/features/why-cant-canada-win-the-stanley-cup/

    For perspective the estimated fanbase in Phoenix is 3X that of Vegas… and while it’s not as big of a travel destination there’s certainly a big enough contingent of Canadian snowbirds and the like that winter in and around the area and attend Yotes games.

  • Mantastic

    I used to think that there wasn’t a chance of hockey in Las Vegas. Now, with all of these rational points you’ve made stacking up against the NHL expanding there, it makes me think it’s just the type of thing Bettman would do.

  • Vanoxy

    Expanding to Vegas doesn’t work, but relocating The Panthers there might be an option.
    They couldn’t draw any worse than they are currently doing in Miami, and that would balance out the conferences with Vegas in the west.

    Then they can expand to Seattle and Quebec City giving us a nice, balanced 32 teams.

    It would be fun speculating on team names anyways…
    The White Tigers
    The Purple Cobras
    The Snake Eyes
    The Empty Pockets
    The Broken Wedding Vows
    The Shattered Dreams

    Good Times!

  • Vanoxy

    Another revenue source being overlooked is player fines.
    The Vegas team could bring in another million+ annually just on missed curfews, late for meetings and conduct detrimental to the team.

    What could go wrong?

  • Waffles

    3 wrong things:

    1. desert

    2 NHL just another show.

    3. Most important, Thomas Vanek and players like him mixing with the wonderful Gamblin’ folk of Vegas.

    Move to Quebec, GTA or best Seattle and Portland so Western teams will actually be in the West! Seattle and Portland already have Hockey present.

  • pheenster

    I think the article is missing the likely business model. Las Vegas will build (or renovate) an arena for popular events such as Celine Dion concerts and etc. These will be the primary attractions. The arena will likely be part of a major casino as recommended by the article to generate additional revenue from gaming. However, a large arena requires a primary tenant as it’s very difficult to have 365 major events every year. This is where a NHL team may fit. Under such a business model, the team does not have to generate a lot of revenue on its own to make money.

    • pheenster

      If revenue is the only concern, then every NHL team should be attached to an Indian Casino?,

      I live in the States but was born in Winnipeg and that team was and is a part of the fabric of the city. In Vegas an NHL team would be just another Celine Dion, but with the dangers of gambling attached to it. Look at Vanek and the amount he was into a bookie for. The cats in Vegas are high stakes and bet on sure things. Having young semi wealthy guys in that atmosphere is asking for trouble.

      A game like hockey loses all credibility if there is a scandal involving throwing games. In hockey it’s easier, because a guy owing money to a low life could take a “stupid” penalty at a terrible time and put his team down 2 men in tie game.

      Bettman went with short money revenue in the states and turned down ESPN for the OUtdoor network which became the something something, now NBC Sports channel. Bottom line with ESPN games would be on every night and with NBCsports it’s two nights and a lot of areas don’t even carry it. Then PPV which threatens to put hockey with boxing….

      More fans = more revenue long term… Grow the sport don’t trip over dollars picking up nickels

  • Mantastic

    Vegas has been trying to get any of the 4 leagues to expand there. While they definitely have the corporate presence, I think it’s a shame that the NHL would rather expand there than award Quebec, Hamilton or Seattle with a team. Only difference is, Vegas has an arena that is either in the works or about to be finished.